The auctioneers had retrieved it from the attic; the surface of the painting was so dirty it looked as if it had been varnished with a mix of caramel and coal dust. Some of the paint was peeling off the canvas in an upper corner. The picture had almost certainly been moldering in the attic for decades: Its giant gilded frame was chipped and cracked and almost black with dust. Mud wasps had built nests between the elaborate curlicues of the frame.
I was just bored enough to look at the painting just long enough to realize that something about it was bothering me.
Why would anybody put such an ugly painting into such an ornate picture frame?
The instant the idea came into my head, I stopped wondering when my parents would give up and started wondering about the painting. It was some kind of landscape. A few trees, some clouds, maybe a river – nothing else was discernible through the murk.
But the frame was huge and heavy and had once been beautiful.
No one, in a thrifty community of Dutch and Scotch-Irish farmers, would have let an empty picture frame sit around; it would have been sold for whatever it would fetch. And no one would ever have bothered putting any frame at all onto this ratty old painting once it had gotten so dirty in the attic.
Which meant that the painting must already have been in this beautiful frame when it went into the attic long ago. Which meant that long before that, before landscapes in ornate frames became unfashionable, somebody must have thought this one was valuable.
Behind the sofa, the curtains were partly drawn. I stood up and pulled them all the way open. A shaft of sunlight hit the painting and cut through the grime. It was as if I had set off a miniature nuclear explosion: Brilliant pink and orange clouds boiled above a line of trees and a waterfall. I walked around the sofa and over to the fireplace, then crouched in front of the canvas and stared at it from a few inches away. Under the accumulated dirt of five or six decades, water cascaded over rocks, wind whipped through a line of trees, and those clouds erupted into towers of fire.
I knew instantly that I was looking at a long-lost masterpiece of the Hudson River School of 19th-century American landscape painters. My thumb had an intuition of its own: I licked it and pulled it lightly across a rock in the bottom left corner. “F CHURCH 1848,” I read through the little window I had just opened in the dirt. My mind raced: Frederic Church, born in 1826, one of his earliest major paintings.
Here it is, after subsequently being cleaned and restored to its original glory. I can assure you it looked nothing like this on that day in 1975:
I shot up the stairs like a rocket. I found my parents, grabbed each of them by the arm and hissed, “There’s a Church downstairs.” My parents, understandably, hesitated – there could be no place of worship in this house of junk. Then they looked in my eyes, and they knew what I meant. I led them downstairs. We lugged the painting outside into the sunlight to look at it – then wordlessly, breathlessly carried it back into the living room.
The sale was the next day, held in the back yard, as so many auctions were in those days. We waited patiently for the painting to come up. The auctioneer, not knowing what it was, called it “an old landscape” and told the crowd that the frame might be worth salvaging if you could find someone to repair it. The audience was astonished when we paid about $2,000 for what one woman sitting in front of us called “a dirty old rag.” The underbidder was a dealer who often followed us around and bid on whatever we did, assuming that anything my parents wanted must be good; my dad called him “the pilotfish.” If not for him, we would have been the only bidder; there were no other takers at any price.
When we got the Church painting home, we worried about its condition. Working with cotton balls dabbed in art-restorers’ cleaning solution, we got most of the grime off it. But parts of the paint were loose and flaking away. It needed urgent care. Before we could even get it to a restorer, Donald Webster, an attorney and art dealer who ran the best auction house in Washington, D.C., C.G. Sloan & Co., visited. He bought the painting on the spot, for what I remember as about $16,000 (or a bit more than $70,000 in today’s money). We hated to part with such a tour de force, but Mr. Webster agreed that the first thing he would do was to take it to the same restorer we would have used.
As always, we didn’t think of what we had done as profiting from the ignorance of others; we thought of it as rescuing an artistically and historically important work of art from oblivion. What would have happened to these treasures if we hadn’t found them? In many cases we were all that stood between them and another century in somebody’s attic or pantry or toolshed – or, eventually, the town dump. I have no doubt, even today, that had we not identified the Church painting for what it was, it would have gone unsold that day and ended up in a landfill.
Shortly after Mr. Webster bought it from us, the painting found its way into the collection of the White House, where (at least as recently as 1990), it hung in the Oval Office.
President-elect Trump and his family have what we might describe, diplomatically, as different taste in interior decorating.
But I hope there will still be a place in their White House for the magnificent Frederic Church landscape that my parents and I rescued from oblivion so many years ago.
As I think back on my childhood and adolescent career, two things stand out for me:
First, how fortunate I was to be raised by such a brilliant mother and father who imparted so much knowledge and intellectual excitement to me at so early an age. And with their zest for the hunt as my inspiration, it’s no wonder value investing had such attraction for me when, later in life, I studied the financial markets.
Second, how important it is to be in the right place at the right time. The art and antiques business in the 1970s was a remarkable confluence of inefficiencies and opportunities to exploit them. Back then, we could drive a few hours in any direction on any weekend and come home with a stationwagon full of beautiful old objects whose intrinsic value almost no one else had recognized. Nowadays, you could comb much of New England for weeks on end and find nothing except art and antiques priced at more than they are worth. The bargains that once abounded have been replaced by immense quantities of overpriced, undesirable mediocrities being passed off as rare and valuable. In a world in which it takes a few seconds to Google what an object sold for on eBay, undervalued art and antiques have all but disappeared.
I’m not nostalgic for my childhood, nor do I regret that I no longer practice much connoisseurship, because I know full well that those days are gone. The market for art and antiques today bears almost no resemblance to the world of my childhood, and the return to those skills, if I tried to earn my living by exercising them again, would be close to nil.2
2. Once a decade or so, on average, I do find a great antique or work of art at a bargain price. And when I do, I buy it. But if I spent every intervening moment looking for more such opportunities, I would be foolishly wasting my time.
The analogy to investing seems, to me at least, so obvious that I hesitate even to point it out. Decades ago, stock-picking was a handicraft in which information moved slowly and unevenly, so the person who knew the most could perform the best – by a wide margin. Think of Warren Buffett buying such tiny flecks of corporate plankton as Sanborn Map and Dempster Mill Manufacturing. Today, with more than 120,000 chartered financial analysts and 325,000 Bloomberg terminals worldwide and with Regulation FD requiring companies to disclose material information simultaneously to all investors, the playing field is close to perfectly level.
If you’re applying the tools that worked so well in the inefficient markets of the past to the efficient markets of today, you are wasting your time and energy. An investor who devotes weeks or months of research to analyzing a single widely-traded stock is like an antique dealer driving across the back roads of New England searching for bargains that, for the most part, disappeared decades ago. It isn’t impossible that you will find a bargain, but the odds that the rewards will